The impact of political risk on businesses can be significant and multifaceted. Here's how:
Financial Losses: Unfavorable political changes can lead to direct financial losses through increased costs, reduced revenue, or asset seizure. Operational Disruptions: Political instability can disrupt supply chains, affect employee safety, and halt operations. Market Access: Changes in trade policies and tariffs can restrict access to key markets, affecting sales and growth prospects. Reputation: Associating with politically unstable regions can harm a company's reputation and brand value.